A Simplification of Industrial Relation Dispute Solution to Improve

the Nation’s Competitiveness

Lanny Ramli

Department of Administrati Law,Faculty of Law, Universitas Airlangga, Surabaya, Indonesia

Keywords: Competitiveness, Dispute, Improvement, Industrial Relation, Simplification.

Abstract: Indonesia as a country has been dealing with a huge number of work force for decades. The number of

worker population that raise to 6.13 million and unemployed down to 0.28 percent per February 2017

comparing to August 2016 are the recent situation the government has to deal with. The total labor market

in February 2017 is 131.55 million but the working population in Indonesia per 2017 is as much as 124.54

million people with 38.08 percent of them reported as workers. At present, Indonesia participates in

ASEAN Economic Society. The ASEAN Economic Community is an integration in facing the free

international trade that occurs among ASEAN countries to realize the ASEAN insight in 2020. ASEAN

Economic Community system gives us a lot of benefits. On the other hand, ASEAN Economic Community

also have negative impacts for Indonesia. The way to avoid the negative impacts of the ASEAN Economic

Community is by improving the human and industrial resources in Indonesia. With the large number of

workers nowadays and the participation of Indonesia in the ASEAN Economic Community might lead into

many problems in the work worldwide between workers and employers. The problems between workers and

employers are resolved in a long time and long way which gives a loss to workers. For the settlement of

industrial relations disputes based on Law Number 2 Year 2004 on Industrial Relations Dispute Settlement.

In solving the dispute we could took a long way, such as: (1) Bipartite negotiations; (2) Settlement industrial

relation dispute in man power officers; (3) The party or parties could choose for the conciliation or

arbitration, if there is no choice, could by mediation; (4) If the mediation fails then it will resolve through an

industrial relations court. Completion with long time (duration) and long stages might cause worryness of

investors who will invest in industrial sector in Indonesia. It will considered as an indicator of the

government's failure to regulate the employment situation in Indonesia. Therefore a simpler, efficient and

quicker solution is needed. The state of problem: Determining a simpler, effective and quicker model of

resolution in industrial relations problem for state innovation competition.

1 INTRODUCTION

Every human being needs a job to fulfil their needs.

(Ramli,2008) that makes them have the same right to

get a job. This is the implementation from Human

Rights (Baut, 1988) that set forth points in the

Universal Declaration of Human Rights. (Brownlie,

1993)

Article 1 Everyone is born independent and has

the same dignity and rights

Article 2 Everyone has the right for freedoms

with no exceptions whatsoever, such as nationality,

color, sex, language, religion, politics or other

opinion, national or community origin, property,

birth or any other position

Article 3 Everyone is entitled to the livelihood,

liberty and salvation of a person

In order to meet the daily needs, not everyone

can be a master for himself. Many people have to

work for others. People who work for other people

are called workers or employee and people who give

jobs are called employers. Workers and employers

are the two parties who have different interests

which might lead into a conflict. The resolution of

the conflict does not only involve both parties but

also the government and its policies. (Jeffrey, 2013)

With a good and wise solution, our country, based

on its economic growth, is expected to be a

competitive country.

622

Ramli, L.

A Simpliﬁcation of Industrial Relation Dispute Solution to Improve the Nationâ

Zs Competitiveness.

DOI: 10.5220/0007548206220626

In Proceedings of the 2nd International Conference Postgraduate School (ICPS 2018), pages 622-626

ISBN: 978-989-758-348-3

2 METHOD

This method used in this research is the purposive

random sampling.

Research Subject: The subjects of study are the

workers, the employers, labour department officer in

Surabaya. Mojokerto, Pasuruan and Sidoarjo.

Settings: PIER (Pasuruan Industrial Estate

Rembang), SIER (Surabaya Industrial Estate

Rungkut), Ngoro Industrial Park (Mojokerto), SiRIE

(Sidoarjo Rangkah Industrial Estate).

Procedures: The study uses in depth interview,

questionnaire, and literature research. Some

questions are stated on questionnaire papers.

About: the matter of dispute, how to solve the

problem (by personal or involving a worker union

and how to solve it) and what the result.

Data Collection: The data will be collected from

questionnaires and in depth interviews to determine

the best and simple solution for all parties.

2.1 Research Tools

The matter of dispute, how to solve the problem

(settlement between worker and employer or settled

by labor department officer) and the result. This

questionnaire is compiled for the matter of dispute,

how to solve the problem and what’s the result. It

was a self-made questionnaire containing

information on sex of worker, education, the kind of

dispute and the model of resolution.

2.2 Research Conducting Method

At first, we elaborate about industrial relation

dispute among the worker and employer. Analyse

the problem and the ways to solve it ( by themselves,

by the labor department officer or until the court

level).

In this research, data analysis was not performed

by statistic form or statistic model but by analysing

in sosio-legal model. The datas collected from some

workers and some factories in different places.

We use some questionare completed by in depth

interview.

The questionare for the workers contains of :

 Age;

 Sex;

 Education;

 Job;

 Employee tenure;

 The status in the factory;

 Number of problems occur in the factory;

 Problems encountered;

 How to solve the problem (by themselves, by

the labor department officer or until the court

level);

 The result?

The questionnaire for the employers contains of :

 Age;

 Sex;

 Educations;

 Job;

 How long as an employer;

 The status in the factory;

 Number of problems occur in the factory;

 Problems encountered;

 How to solve the problem (by themselves, by

the labor department officer or through the

court);

 The result?

The questionnaire for the labor department

officer contains of :

 Age;

 Sex;

 Educations;

 Job;

 Employee tenure;

 Success level of problem solving;

 Actions taken if problem solving fails;



Problems encountered.

2.3 Finding

2.3.1 Human Right and The Right for

Working

Human rights are the basic rights that every human

being possesses because of his dignity as a human

being and not given by society or State but derived

from God Almighty. (d’Amato. 2007)

The Four Freedoms were goals articulated by

United States President Franklin D.Roosevelt on

Monday, January 6, 1941. In a address known as the

Four Freedoms speech, he proposed four

fundamental freedoms that people “everywhere in

the world” ought to enjoy:

 Freedom of speech;

 Freedom of worship;

 Freedom from want;

 Freedom from fear.

Additional kind of human freedom needed along

the growth of era’s development. People was free in

terms of expressing opinions, freedom of religion,

worship and belief, freedom of will, freedom from

fear now includes the freedom to earn income for

decent living for humanity. Workers and employers

need each other.

A Simpliﬁcation of Industrial Relation Dispute Solution to Improve the Nationâ

Zs Competitiveness

623

Indonesia is ranked among the 11 highest

competitive countries in Asia Pacific, after

Singapore, Japan, Hong Kong, New Zealand, China

Taipei, Australia, Malaysia, South Korea, China, and

Thailand. Indonesia is unable to compete with China

because of bureaucratic and political issues is the

assumption to be one of the main causes of high cost

economy. Indonesia's weaknesses in terms of

employment are (Aditya Warman, 2016)

 Competence is low;

 The quality of education is low;

 Infrastructure that still have a lot to clean up;

 Regid employment arrangements.

Many problems arise between workers and

employers because of two different points of view

and finally because neither side is willing to

succumb to causing a deadlock here and there so that

a strike is one option. Strike is one form of rejection.

To overcome individual and group resistance, Coch

and French Jr propose six tactics: (Dirjen, 2016)

 Education and communication is to provide an

explanation of the background, purpose,

consequence of the holding of change;

 Participate, invite all participate in making

decisions, the leader only as a facilitator of the

motivator;

 Provide ease and support;

 Negotiations with resistant parties to change;

 Manipulation and co-optation that covers the

actual conditions with more interesting,

spreading rumors and more;

 Coercion, give threats and impose a penalty

that is resistant.

55% of the workforce in Indonesia consists of a

lower-level or low-educated workforce that is prone

to conflict. Conflict between workers and employers

causes Indonesia's investment attractiveness to

decline. Not all entrepreneurs understand well how

to manage risk management in industrial relations,

so their thought is about solving problems rather

than taking precautions. In such circumstances law

enforcement from the government as regulator is

inadequate so strike becomes the only way to solve

the problem and it is feared by investors.

In this research note that in working relationship

between workers and entrepreneurs prone to conflict

with a different point of view. Due to the lack of

understanding of which conflict management is

better preventing than resolving conflicts, there are

strikes. This strike is feared by investors.

2.3.2 Dispute Resolution Model for State

Innovation Competition

The third generation of human rights interconnect

and conceptualize the value demands relating to the

previous two generations of human rights. There are

6 (six) human rights demanded. The rights are:

 The right to self-determination in the political,

economic, social and cultural fields;

 The right to economic and social

development;

 The right to participate and utilize the

"common heritage of mankind" (shared space-

space resources, scientific and technical

information and progress, and cultural

traditions, locations and monuments);

 The right to peace;

 The right to a healthy and balanced

environment;

 The right to natural disaster relief.

The definition of rights is not also defined, but a

core contained in the right, ie the existence of a

claim, that speaks of our right to imagine that there

is a "claim" and in relation to the legal protection for

the people imagined a "claim" from the people: and

in this case Louis Henkin in his article entitled The

Rights of Man Today, says: (Hadjon, 2007)

“...human rights are claims asserted recognized

“as of right”, not claim upon love, or grace, or

brotherhood or charity : one does not have to earn

or deserve them. They are not merely aspirations or

moral assertions but, increasingly, legal claims

under some applicable law.”

Concerning to the existence of conflicts by

defending their respective rights, employers and

workers should recognize the root causes and

challenges facing the Indonesian economy and

explore and establish a framework for genuine and

active social partnerships to support industrial

tranquility and revitalize existing sectors.

Several stages in the settlement of the dispute make

Indonesia classified as a country that has weak

competitiveness in the industrial sector

. The Stages applied so far based on Law

Number 13 Year 2003 and Law Number 2 Year

2004 are as follows:

 Bipartit;

 Tripartite;

 Mediation;

 Industrial Relations Court.

Before make a process at Industrial Relation

Court, the worker prefer to choose the strikes.

According the worker, strikes are the last effort after

struggling over non-fulfillment of rights or disputes

ICPS 2018 - 2nd International Conference Postgraduate School

624

takes place. The ideal and detail ways in handling

problems occured in companies based on Act No. 2

of 2004 on Industrial Relations Dispute Settlement

Act are:

1.Completed bipartite settlement between

workers and employers

2.If the dispute could not be completed at the

company level, then resolved through employees in

the local manpower office

3.If the dispute still could not be resolved by

employees in the labor service then the parties are

asked to choose arbitration or conciliation settlement

4.If the parties do not choose for arbitration or

conciliation then this dispute shall be settled through

mediation in accordance with applicable law.

5.If the agreement has not reached, the dispute

should be settled through the industrial relations

court.

Finally, they need a quick and effective solution

before taking it to the court and conducting a strike

to reach the quick solution. But the result might not

be uncertain. They could both fail and success as

well.

From this research, another reason why the

workers need a different solution to solve the

problem by out of court is, according the workers,

the solution based on regulation takes a long time

and rigid. Solution by law through the court makes

the parties become rivals. As their dispute solutions,

the workers want the flexible management to fulfill

their need. On the other hand, according the

employer, solution through the court decision gives

benefit and certainty for them.

According the union worker, many cases are

solved through the court decision and It’s more

satisfying for the union. Unfortunately, not all

workers joint with the union.

If both parties don’t get a solution or agreement

for the dispute, the strike will be the “final solution”

to conduct. To minimize the industrial relations

disputes and strikes, both parties should build an

effective communication. The next revolution in

technology is going to be much more about focusing

on the human dimension, making technology easier

for people to use. Usually, strike action (which is the

total withdrawal of labour) results in a fundamental

breach of an employment contract. (Barrow,2016)

Strike is a basic right of workers as a reflection of

the Constitution of the Republic of Indonesia 1945

Article 28 E Paragraph (3): Everyone has the right to

freedom of association, assembly and expression.

Thus the Constitution provides guarantees for

expressing opinions including strikes (Aditya

Warman, 2016)

In research many parties want the abolition of

the Industrial Relations Court because it makes the

longer the process of industrial relations settlement.

With a harmonious relationship between the parties

raises the following implications:

 Recognize and respect their basic rights and

interests in accordance with the laws and

regulations of the Republic of Indonesia and

the ILO Conventions;

 Receive a meeting point or conflict of interest

between workers and employers. The efforts

of both parties as far as possible accommodate

or accommodate their respective interests. In

order to maintain harmony of relationships

also need to have a conflict resolution that

occurs in a way that benefits both sides;

 Increate close cooperation to develop trust and

capacity building mechanisms and foster an

environment that supports these principles and

processes.

3 CONCLUSIONS

The settlement dispute give some ways for the

solution. Therefore a simpler, efficient and quicker

solution is needed. Situation and condition that are

not expected can occur, such as:

a. Strike

b. Lock out

c. Anarchy

d. Damage

e. Lossing

f. Termination

g. Unemployment

All situations above make the industrial relation

not conducive. The topics of disagreement that

caused to the strike are:

1.collective labor agreement

2.review the labor law

3. Industrial relationship

4.social-security

5. Payment or salary

Until now strike usually choosen despite the

strike not reflection the deadlock.

The points could led to the failure of the

negotiations that could be strike, among others:

1.Lack of awareness attitude from the mediator

2.Lack of openness from the parties

3.The Mediator only focus on suggestions

4.The Mediator is not competent to solve the

problem

5.There have no minimum standards of mediation

process

A Simpliﬁcation of Industrial Relation Dispute Solution to Improve the Nationâ

Zs Competitiveness

625

For further, we should arising again the

awareness for good solution with local wisdom like:

“musyawarah untuk mufakat” as the good choice for

innovation problem solving.

By using the local wisdom means we build the

gate of peace in industrial relationship

Difficult settlement between workers and

mployers caused by the complexity of the way

handling disputes. This led to a decrease in investor

interest.

4 RECOMMENDATION

We need to simplify the process of industrial

relations disputes by cutting the length and

complexity of the process of obtaining justice. The

pruning lies in the elimination of the settlement

process in court. This is indispensable because to

support the state competition in the economy by

minimizing the prolonged labor conflict.To make

simple the process, we must avoid industrial court

process. It’s enough by bipartite, tripartite,mediation

but if mediation fail, they could go to court as the

cases in normally, not special court in industrial

court. This condition could support the nation

competitiveness.

REFERENCES

Barrow, Charles, 2016. Industrial Relation Law,

Cavendish, London

Brand Jeffrey, 2013.Philosophy of Law, Bloomsbury,

London.

D’Amato Anthony, 2007. Analytic Jurisprudence

Anthology,Anderson Publishing, Ohio.

Baut, S., Paul., Harman, Beny, K., 1998. Universal

Declaration of Human Rights Yayasan LBHI, Jakarta.

Brownlie, Ian. 1993. Universal Declaration of Human

Rights disebut sebagai Deklarasi Sedunia Tentang Hak

Hak Asasi Manusia. Dokumen Dokumen Pokok

Mengenai Hak Asasi Manusia. UI Press, Jakarta.

Hadjon, M., Philipus. 2007. Perlindungan Hukum Bagi

Rakyat. Peradaban, Jakarta.

Ramli, Lanny. 2008. Hukum Ketenagakerjaan di

Indonesia, Airlangga University Press, Surabaya.

Warman , Muhammad, Aditya. 2016. Dispute Resolution,

Pusat Studio Apindo, Jakarta.

Dirjen Hubungan Industrial. 2016. Ketrampilan

Bernegosiasi dalam Hubungan Industrial, Jakarta.

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